All too often, separated couples go to great lengths to minimize or hide assets that would otherwise be divided in a divorce. When those efforts are deemed to be in “bad faith,” the cost orders imposed by courts can make the financial pain much worse.
That’s a lesson an Ontario man discovered recently after Justice Erika Chozik of the Ontario Superior Court of Justice found that he had “fraudulently” transferred his home to his brother in order to argue he could not pay his former wife what she was owed.
Following a seven-day trial, Justice Chozik ordered the husband and his brother to pay costs of $150,000 to the husband’s former wife, a significant amount that reflected the pair’s efforts to make it impossible for the wife to collect money owed to her. According to the judge, those efforts amounted to bad faith.
The couple involved in the case married in Portugal in 1988 and immigrated to Canada. The wife was a cleaning lady, a homemaker and cared for the couple’s two children. The husband was a construction labourer. By all accounts, the couple worked hard and saved their money. They owned their $850,000 home outright and a condominium in Portugal. After 30 years of marriage, the couple separated in 2018.
Two years prior to separation, the husband retired, at which time he had accumulated 39 years of service. Because of his lengthy service, the husband’s pension was worth nearly $800,000.
One year after the couple separated, the wife agreed to sell her interest in the home to the husband. The husband paid the wife $425,000 and the wife’s interest in the home was transferred to the husband. All other issues arising from the couple’s separation remained unresolved.
One year later, the wife told the husband she wanted to
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